US to investigate Brazil’s digital payment system
The United States has launched a sweeping Section 301 investigation into Brazil’s digital trade practices, with its rapidly growing central-bank-operated instant payment system, Pix, squarely in the crosshairs.
The probe, initiated at the direction of President Donald Trump and announced by U.S. Trade Representative Jamieson Greer, will scrutinize whether Brazil’s policies—including preferential tariffs, regulatory burdens, and alleged retaliatory actions against U.S. tech firms—are unfairly putting American companies at a disadvantage, particularly in the digital payments sector.
Brazil’s Pix system has become a focal point as it rapidly displaces private-sector alternatives, raising U.S. concerns that domestic competitors and U.S. firms may be losing ground due to government-backed advantages.
The investigation will specifically evaluate whether Brazil’s treatment of digital commerce and electronic payment services—such as Pix—creates “unreasonable or discriminatory burdens” on U.S. businesses, potentially undermining the competitiveness and market access of American payment providers.
According to the U.S. Trade Representative, Brazil’s restrictions on data transfers and the alleged favoring of government-run payment platforms over private, foreign competitors are areas of particular concern.
The probe extends beyond digital payments to include a wide array of issues: preferential tariffs for non-U.S. partners, accusations of weak anti-corruption and intellectual property enforcement etc. The U.S. also accuses Brazil of penalizing American tech companies that refuse to comply with local content moderation demands, referencing the 2024 nationwide suspension of social media platform X after Elon Musk declined to appoint a legal representative in Brazil.
Tensions between the two nations have escalated sharply in recent weeks. On July 7, President Trump publicly called on Brazilian authorities to drop the prosecution of former President Jair Bolsonaro. Days later, Trump threatened a 50% tariff on Brazilian imports—set to take effect August 1—and launched the Section 301 investigation, with Brazil pledging to retaliate with equivalent tariffs. This action marks a rare use of U.S. trade measures in response to political disputes, not just trade deficits.
The investigation process will include public hearings, evidence gathering, and consultations with the Brazilian government before the U.S. determines whether to take retaliatory action. Public comments are being invited on all aspects of the investigation, and a hearing is scheduled for September 3, 2025. If the U.S. finds Brazil’s practices actionable, it could result in further tariffs or other trade restrictions.
In the broader context, the U.S. probe reflects growing geopolitical and economic rivalry: Brazil’s Pix is expanding rapidly as the BRICS group—of which Brazil is a founding member—explores alternatives to the U.S. dollar, and Trump has also threatened a 10% tariff on all BRICS imports to protect the dollar’s global supremacy.
The investigation signals that national digital payment systems are now seen as strategic assets in international trade, and their regulation—or perceived favoritism—can trigger significant diplomatic and economic consequences.
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